Which of the Following Statements Is Most Correct

question 49

Multiple Choice

Which of the following statements is most correct?

• A) If annual compounding is used,the effective annual rate equals the simple rate.
• B) If annual compounding is used,the effective annual rate equals the periodic rate.
• C) If a loan has a 12 percent simple rate with semiannual compounding,its effective annual rate is equal to 11/66 percent.
• D) Both answers a and b are correct.
• E) Both answers a and c are correct.

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Definitions:

Castilian Export Economy

Refers to the historical economic model of the Castile region of Spain, focusing on exporting goods, especially during the 16th and 17th centuries.

Sixteenth Century

The period from 1501 to 1600, marked by significant events such as the Renaissance, the Reformation, and the Age of Exploration.

Wool

A natural fiber obtained from sheep and other animals, used for textiles and fabrics because of its warmth and durability.

Dutch Reclamation

The process of creating land from sea, lakes, or swamps in the Netherlands, involving the use of dikes and drainage canals.